At what time horizon? For anything over a year, I’d default to the quantity theory of money: inflation should roughly equal the rate of money supply growth (i.e., a central bank choice) minus real rates of economic growth. Increasing the money supply at 30% per year is easy, so if the Fed wanted to avoid deflation it seems like it could. The short-run during such a dramatic regime change could become whacky.
At what time horizon? For anything over a year, I’d default to the quantity theory of money: inflation should roughly equal the rate of money supply growth (i.e., a central bank choice) minus real rates of economic growth. Increasing the money supply at 30% per year is easy, so if the Fed wanted to avoid deflation it seems like it could. The short-run during such a dramatic regime change could become whacky.